SOCIAL COMPARISON AND EFFORT PROVISION: EVIDENCE FROM A FIELD EXPERIMENT

Social comparison has potentially far reaching consequences in many economic domains. We conducted a field experiment to examine how social comparison affects workers' effort provision if their own wage or that of a co‐worker is cut. Workers were assigned to groups of two, performed identical individual tasks, and received the same performance‐independent hourly wage. Cutting both group members' wages caused a decrease in performance. But when only one group member's wage was cut, the affected workers decreased their performance more than twice as much as when both workers' wages were cut. This finding indicates that social comparison among workers affects effort provision because the only difference between the two wage‐cut treatments is the other group member's wage level. In contrast, workers whose wage was not cut but who witnessed their group member's pay being cut displayed no change in performance relative to the baseline treatment in which both workers' wages remained unchanged. This indicates that social comparison exerts asymmetric effects on effort.     

Increasing flexibility in shiftwork arrangements

Abstract

Renewed interest in increasing flexibility in working time arrangements derives from both social and economic changes. The dominant reasons for greater flexibility in shiftwork arrangements relate to diverse business demands resulting from competitive pressures and rapid technological change, modern workers' personal preferences about the timing of work, and the reduction in hours of work. Many new patterns are applied to meet these demands. A review of innovative patterns reveals their close link with shorter working hours and diversifying career needs. Typical patterns include (a) hours averaging schemes, (b) flexible daily hours, (c) individualized free time schemes. (d) flexitime plus shift systems, (e) a combination of full-time and part-time systems, (f) job sharing, (g) temporary transfer to day work, and (h) career break schemes. Attention is drawn to multi-skilling of workers associated with more independent responsibility and closer communication. Changes to a flexible pattern are usually a result of consultations that respond to the conflicting interests of employers and workers. Support is necessary for a process of informed joint planning. Particularly useful are: (1) identification of operational demands and individual preferences about increasing flexibility in work schedules; (2) presentation of available options with information on implications for workers' health and social life; and (3) facilitating training and group consultation. The adjustments required depend greatly on how the tasks of individual workers are reorganized. In increasing the flexibility of shift schedules, it is important to learn from positive experiences of joint optimization of work content and working time arrangements.     

Does Immigration Raise Blue and White Collar Wages of Natives? The Case of Italy

This paper analyses both theoretically and empirically the effects of immigration on the wage rate of native workers. There is rare evidence in empirical literature that immigration generates a fall in the wages of manual workers. By hypothesizing an economic system where advanced firms buy an intermediate good from traditional firms, which employ manual workers in both clean and dirty tasks, the latter being more disliked by native workers, we present a theoretical model that justifies these results. We conclude that native skilled wages always increase whereas native unskilled wages can both increase or decrease with immigration. An empirical analysis of the Italian labour market follows, showing that native workers' wages always rise with immigration.     

Wage Bargaining with On‐the‐Job Search: Theory and Evidence

Most applications of Nash bargaining over wages ignore between‐employer competition for labor services and attribute all of the workers' rent to their bargaining power. In this paper, we write and estimate an equilibrium model with strategic wage bargaining and on‐the‐job search and use it to take another look at the determinants of wages in France. There are three essential determinants of wages in our model: productivity, competition between employers resulting from on‐the‐job search, and the workers' bargaining power. We find that between‐firm competition matters a lot in the determination of wages, because it is quantitatively more important than wage bargaining à la Nash in raising wages above the workers' “reservation wages,” defined as out‐of‐work income. In particular, we detect no significant bargaining power for intermediate‐ and low‐skilled workers, and a modestly positive bargaining power for high‐skilled workers.     

Are More Competent Workers More Satisfied?

Abstract. In this paper, we analyse the relationship between workers' competencies and their job satisfaction in the context of dual (i.e. vocational versus communicative) skill demands. We analyse the effects of workers' competencies on their overall, intrinsic, and extrinsic job satisfaction. We focus on pharmacy assistants who need both pharmaceutical and communicative competencies in their work. Results from a linked employer–employee survey show that assistants with more communicative competencies are more satisfied with their job, whereas assistants with more pharmaceutical competencies are not more satisfied than the less competent assistants. In addition, workers who perform tasks below their level of competence are more dissatisfied with both their remuneration and career prospects and the content of their job as such, than were other workers. Our results indicate that the demand shift from vocational towards communication skills, which occurs in many professions, can affect the job satisfaction of the most competent workers.     

Sickness Absence,Sick Leave Pay,and Pay Schemes

Utilizing Norwegian linked register and survey data, while exploiting a discontinuity in public sick pay legislation, I show that the public sick pay compensation level causally affects male performance pay workers' sick leave days. Both male and female performance pay workers experience longer sick leaves when provided private supplementary sick pay compared with those being eligible for public sick pay only. This differential impact of the replacement rate on workers' sick leave rates reveals heterogeneous behavioural changes following public sick pay cuts, and this heterogeneity will be reinforced by the provision of employer‐provided sick pay to attractive worker groups.     

Psychosocial safety climate,psychosocial and physical factors in the aetiology of musculoskeletal disorder symptoms and workplace injury compensation claims

Causal agents for workers' compensation claims and physical injury have largely been identified as physical demands. We proposed an integrated theory of physical injury (i.e. musculoskeletal disorder symptoms [MSDs]) and workers' compensation claims, which combined psychosocial and physical mechanisms. A random, population-based sample of 1095 Australian workers completed a telephone interview on two occasions 12 months apart. As expected, the physical mechanism was confirmed; physical demands were related to MSDs, which in turn predicted workers' compensation claims. Further, a novel psychosocial mechanism was confirmed. Psychosocial safety climate (PSC; perceptions about the organisation's climate for psychological health) was a precursor to psychosocial risks (e.g. harassment, violence, bullying and work pressure). In turn, these psychosocial risks were related to emotional exhaustion, MSDs and then workers' compensation claims. Evidence was therefore provided for psychosocial-physical processes in explaining MSDs and workers' compensation for claims for physical injury. Occupational health and safety legislators and policy makers should be aware that, beyond physical demands, factors usually associated with risk for mental stress claims (e.g. harassment, bullying, and violence) may additionally manifest in physical health problems and workers' compensation injury claims. Focusing on modifying the PSC in an organisation, “the cause of the causes”, may be an effective injury prevention and intervention strategy.     

DISTANCE TO RETIREMENT AND OLDER WORKERS‘ EMPLOYMENT: THE CASE FOR DELAYING THE RETIREMENT AGE

This paper presents empirical evidence and a theoretical foundation in favor of the view that the retirement age decision affects older workers' employment prior to retirement. To the extent that there are search frictions on the labor market, the return on jobs is determined by their expected duration: The time to retirement is then key to understanding older workers' employment. Countries with a retirement age of 60 are indeed characterized by lower employment rates for workers aged 55–59. Based on the French Labor Force Survey, we show that the likelihood of employment is significantly affected by the distance to retirement, in addition to age and other relevant variables. We then extend McCall's job search model by explicitly integrating life‐cycle features with the retirement decision. Using simulations, we show that the distance effect in interaction with the generosity of unemployment benefits and the depressed demand for older workers explains the low rate of employment just before the eligibility age for the Social Security pension. Finally, we show that implementing actuarially fair schemes not only extends the retirement age, but also encourages a more intensive job search by older unemployed workers. (JEL: J22, J26, H55)     

The Determinants and Some Consequences of Unemployed Workers' Wage Demands

This paper studies the determinants and consequences in the early stages of the hiring process of unemployed workers' wage demands using direct data on workers' wage requests. We show that most unemployed workers want a wage close to their previous wage, and thus much more than they get in unemployment benefits. However, some groups, such as women, tend to demand lower wages. Moreover, we find that workers with high wage demands are contacted by firms less often than otherwise similar workers with lower wage demands. Thus, our results suggest that too high wage demands may contribute to high unemployment.     

A Study of the Impact of an Integrated Information Technology on the Time Utilization of Information Workers

This paper examines the impact of the implementation of an integrated information technology (IIT) on the time utilization of information workers as mediated by the content of the information work performed. The IIT in this study is a system of personal computers linked together in a network for sharing computing, data, and communication resources. The subjects of the study were two groups of information workers in an academic field setting. One group consisted of knowledge workers whose chief activity was to advise and counsel students. The other group represented lower level information workers who provided support service to an academic department. A two-dimensional framework was used to classify each of the activities an information worker performs relative to its importance and programmability within the context of the information work. Using work sampling methodology, it was determined that the IIT was associated with the knowledge workers' reallocation of work time to important yet relatively unstructured tasks. The lower level information workers became more efficient in performing highly structured skill-based activities. However, there was no statistically significant improvement in the effectiveness of the work completed as perceived by the clients of both groups of information workers. The results suggest that when an IIT is implemented, the manner in which newly available time is utilized depends on the nature of the information work performed by the users.     

A Theory of the Firm with Non‐binding Employment Contracts

This paper examines an employment relation in which individual workers enjoy some bargaining power vis‐a‐vis the firm although they are not unionized. The main elements of the situations studied here are that the employment contracts are non‐binding across periods of production and that the firm has opportunities to replace workers. The paper analyzes a dynamic model in which the processes of contracting and recontracting between the firm and its workers are intertwined with the dynamic evolution of the firm's workforce. The analysis of the model is somewhat complicated because the employment level is a nondegenerate state variable that evolves over time and is affected by past decisions. The main analytical results characterize certain important equilibria: the profit maximizing and stationary equilibria. The unique stationary equilibrium is markedly inefficient: it exhibits inefficient over‐employment and the steady state wages coincide with the workers' reservation wage. It confirms earlier results derived by Stole and Zwiebel (1996a, b) in the context of a static model and shows that they are very robust even when the firm has nearly frictionless hiring opportunities. In contrast, in the profit maximizing equilibrium the outcome is nearly efficient and the wage exhibits a mark‐up over the reservation wage.     

RELIABILITY-CONSTRAINED PRICING,CAPACITY, AND QUALITY: AN ILLUSTRATION OF ECONOMIC CONCEPTS TO POSTAL SERVICES

A model is developed from which welfare-optimal prices, capacities, and reliabilities for a service provider are simultaneously determined. Solutions are determined under conditions of stochastic demand subject to a reliability constraint on service quality. Both quality of service provided, as well as price, impact on demand for services rendered. Results indicate that (i) optimal prices are equated to the reliability-constrained marginal costs, (ii) optimal reliabilities require that the marginal benefits of increasing reliability are equated to the marginal costs of doing so, and (iii) optimal capacity allocation involves minimizing the system's expected costs subject to meeting the prespecified reliability constraint for service quality. The model is applied to postal delivery services in light of the growing competition that has emerged in this industry.     

An Assessment of the Italian 2007 Complementary Social Security Reform: A Simulation Approach

In this paper we aim at assessing the outcomes of the 2007 Italian reform of the complementary social security scheme and at identifying the determinants behind them. The reform provided workers with relevant incentives to switch the investment of about 7 per cent of their gross yearly wages from a firm‐managed scheme (which took the form of a termination indemnity payment, the Trattamento di Fine Rapporto scheme) to an external pension fund. We provide a theoretical framework to model the workers' problem of choosing between these two different forms of complementary social security schemes and we then perform an agent‐based simulation taking into account all the details of the reform. Differently from previous contributions, we stress the impact that the investment decision has on the financial health of firms and, consequently, on workers' employment stability. Our simulations are able to replicate the Italian data in terms of adhesion rates to complementary social security and also to identify some of the key determinants of that outcome, such as fiscal incentives, individual preferences, the working of both the Italian labour and the financial markets and the productive structure of the Italian economy.     

The relationship between HRM practices and organizational commitment of knowledge workers. Facts obtained from Swiss SMEs

This paper explores the effects of human resource management (HRM) practices in Swiss small-to-medium enterprises (SMEs). More specifically, the main objective of this study is to assess the impacts of HRM practices developed in Swiss SMEs upon the commitment of knowledge workers. Using data from a survey of over 198 knowledge workers, this study shows the importance of looking closer at HRM practices and, furthermore, to really investigate the impacts of the different HRM practices on employees' commitment. Results show, for example, that organizational support, procedural justice and the reputation of the organization may clearly influence knowledge workers' commitment, whereas other HRM practices such as involvement in decision-making, skills management or even the degree of satisfaction with pay do not have any impact on knowledge workers' commitment.     

The Moderating Effects of National Age Stereotyping on the Relationships between Job Satisfaction and its Determinants: A Study of Older Workers across 26 Countries

This research explores how national age stereotypes impact older workers' job‐related perceptions by examining probability based samples across 26 countries taken from the European Social Survey. Multilevel data analysis was undertaken. Results show that, at the individual level, both extrinsic rewards and intrinsic rewards directly impact older workers' job satisfaction. At the country level, significant variations are found in the relationships between job satisfaction and related rewards for older workers across the 26 countries. Society's stereotypical views towards older people explained some of these cross‐country variations. This study contributes to extant literature by explicating the process by which society's age stereotypes and the meta‐stereotypes held by older workers affect how these workers make sense and take meaning out of their job‐related circumstances leading to enhanced or diminished job satisfaction. Implications highlight the need for management to be vigilant in identifying and dealing with age stereotypes in the workplace. Furthermore, managers need to be more aware of the potential harmful consequences arising from negative meta‐stereotypes and should implement strategies to tackle workplace stereotypes that would lead to negative meta‐stereotypes held by older workers.     

A model of injustice,abusive supervision,and negative affect

In this study we test a model of workplace interactional injustice, abusive supervision, and subordinate outcomes (work–family conflict and job performance) using affect to explain behavior. In a sample of 200 full-time workers from various industries, their supervisors, and workers' family members, for a total sample of 600 respondents, we position state negative affect as the explanatory mechanism for both how supervisors' perceptions of injustice are associated with subordinates' perceptions of abusive supervision, and also how abusive supervision, in turn, may be associated with subordinates' job performance and their family members' perceptions of work–family conflict. Organizational justice theory underpins our model.     

公平感对供应链成员定价决策影响的研究

本文研究公平感对由一个供应商和一个零售商组成的二级供应链中的定价决策的影响,其中供应商决定批发价格,零售商在接受供应商批发价格合同之后决定零售价格,市场需求受到零售价格的线性影响.采用管理实验方法得出,首先,供应商的批发价格和零售商的零售价格均分别低于完全理性假设下的均衡解;供应商是利他性的,即,乐于看到零售商收益的增加,并且,供应商认为零售商是完全理性的,即零售商的决策目标是最大化自身收益;然而,零售商却是刻毒性的,即乐于看到供应商收益的减少.其次,批发价格的变异度大于零售价格的,即供应商决策的难度大于零售商的.给管理者的启示是:供应商应考虑零售商的刻毒性的特征,降低批发价格,以提高零售商接受供应商所提批发价格的概率;此外,还应该为供应商提供辅助决策手段,以降低批发价格的变异度,提高决策的准确性     

Nonexclusive Competition in the Market for Lemons

A seller can trade an endowment of a perfectly divisible good, the quality of which she privately knows. Buyers compete by offering menus of nonexclusive contracts, so that the seller can privately trade with several buyers. In this setting, we show that an equilibrium exists under mild conditions and that aggregate equilibrium allocations are generically unique. Although the good for sale is divisible, in equilibrium the seller ends up trading her whole endowment or not trading at all. Trades take place at a price equal to the expected quality of the good, conditional on the seller being ready to trade at that price. Our model thus provides a novel strategic foundation for Akerlof's (1970) results. It also contrasts with competitive screening models in which contracts are assumed to be exclusive, as in Rothschild and Stiglitz (1976). Latent contracts that are issued but not traded in equilibrium play an important role in our analysis.     

Measuring the Contribution of Workers' Health and Psychosocial Work‐Environment on Production Efficiency

Increasingly many firms have started to implement programs intended to improve the workers' health and the psychosocial work‐environment, as well as other attributes of labor quality. Motivated by the need for evaluating to what extent the programs affect a firm's productivity performance, this study discusses a model for analyzing the contribution of labor quality attributes toward firm productivity. To assess the contribution from the labor quality attributes, we model firm productivity as the outcome of two separate processes within a firm: the physical production process and the labor quality process. Firm productivity is measured by a Malmquist‐like productivity index and is computed by Data Envelopment Analysis. Based on bootstrap methods we analyze potential statistical bias and provide bias‐corrected productivity estimates. The labor quality attributes are first modeled at an individual worker level as latent variables using Item Response Theory, and then aggregated to a firm‐level. The model is empirically validated using data from three manufacturing plants that participated in a coordinated worksite health promotion program. Over a 4‐year period (2000–2003), we observed a general improvement in efficiency of 2–5%, half of which could be attributed to an improvement in workers' health and psychosocial work‐environment. A key benefit with the model is that it is practical, easy to implement, and very fast to compute. The model also constructively contributes to the discourse on sustainability by providing a framework for deriving meaningful metrics and providing tangible measurements on the effect of sustainability‐related issues.